U.S. Judge Reduces Apple's Patent Award in Samsung Case

A federal judge threw out more than 40% of the $1 billion verdict in Apple's patent case against Samsung, ordering a new trial to consider the proper amount owed to Apple. WSJ's Ian Sherr reports. (Photo: Getty Images)

U.S. District Judge Lucy Koh, who presided over the jury trial between the two rivals in a California courtroom last summer, on Friday overturned a jury's damage award for about half of the devices at issue in the case.

The ruling slashes the amount Samsung is obligated to pay Apple by about $450.5 million, or nearly 43%, to $598.9 million.

She ordered a new trial to consider the proper amount owed to Apple for the devices for which she reduced the damages.

A Samsung spokesman said the South Korean company was pleased with the jduge's decisions to reduce the jury's award and deny a permanent injunction against its products. "Samsung intends to seek further review as to the remaining award," he said. An Apple spokesman declined to comment.

Judge's Order

The judge's ruling slashes the amount Samsung is obligated to pay Apple by about $450.5 million, or nearly 43%, to $598.9 million.
Getty Images

The ruling is a setback for Apple, which has locked horns with Samsung in courtrooms around the world for nearly two years—one of the most prominent in a series of patent battles in the smartphone industry.

Last August, the jury found Samsung's devices infringed six Apple patents. Their damage award of slightly more than $1 billion was one of the largest patent awards on record.

While reducing the potential financial blow to Samsung—at least temporarily—the ruling could also be a step on the road to settlement.

Christal Sheppard, a former chief patent and trademark counsel for Congress and now a law professor at the University of Nebraska, noted that both companies can now claim victory in this patent battle—Apple, for its initial win and Samsung for its reduction of damages.

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"They've made their point and the devices are no longer relevant," she said, adding that Samsung has since changed its smartphones and tablets so they no longer infringe Apple's patents. "Both sides see some uncertainty in this process and there's little upside."

She said it is unclear how the new trial would proceed, but noted that Judge Koh's decision appeared to mirror that of other judges who have complained that there aren't currently good ways to calculate damages in these massive patent battles.

Judge Koh's order included discussion of Apple's argument that Samsung's infringing devices caused it to lose profits. As a result, a calculation by one of its experts about how much time Samsung's infringing products disrupted sales, and how much that hurt Apple, was an important part of the jury's final decision.

An additional element was when Samsung had received notice that it was infringing Apple's patents, and how many products were sold afterward.

In her 27-page order, the judge also discussed Apple's request for additional damages. She said the iPhone maker hadn't given enough evidence of lost profits to justify an increase in its award and neither company had cited enough case law to back up some of their claims.

She also noted that due to the way one of Apple's witnesses argued how much the company should be awarded per device for each infringed patent, it was hard to reasonably calculate the right amounts based on various timelines about when Samsung was informed it had been infringing and how much money it had made since.

The new trial will involve four Samsung phones—the Gem, Indulge, Infuse 4G and a Galaxy S II sold by AT&T Inc.T-0.17% —and will determine how much damages Apple should be awarded for each product.

In her order, Judge Koh said the jury's award still stands for 14 of the devices targeted in the case, including Samsung's Galaxy Ace, Galaxy S II i9100, Galaxy Tab 10.1 WiFi and its 4G LTE variant, among others.

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